Neither, really. Workers’ compensation is a form of insurance that employers purchase or provide. However, the rules governing what a workers’ compensation insurance policy must cover are, for the most part, set forth in state law, and a state agency oversees workers’ compensation compliance and disputes.
Federal employees and those working in certain industries, however, such as railroad workers and longshoremen, are covered through different workers’ compensation insurance overseen by the federal government. For example, the U.S. Department of Labor oversees four workplace disability programs, including the Energy Employees’ Occupational Illness Compensation Program, the Federal Employees’ Compensation Program, the Longshore and Harbor Workers’ Compensation Program, and the Black Lung Benefits Program.